This quarterly report on Form 10-Q (the “Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Discussions containing such forward-looking statements may be found in Part I - Items 1, 2, and 3 hereof, as well as within this Report generally. In addition, when used in this Report, the words “believes,” “anticipates,” “expects,” “estimates,” “targets,” “plans,” “intends,” “will,” and similar expressions related to the future are intended to identify forward-looking statements. All forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from projected results.
In addition, the preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates and assumptions are based on knowledge of current events and planned actions to be undertaken in the future, they may ultimately differ from actual results. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. All estimates and assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from these estimates and assumptions.
The risks and uncertainties of Veeco Instruments Inc. (together with its consolidated subsidiaries, “Veeco,” the “Company,” “we,” “us,” and “our,” unless the context indicates otherwise) include, without limitation, those set forth under the heading “Risk Factors” in Part 1, Item 1A of our 2023 Form 10-K, and the following:
Risks Associated with Operating a Global Business
| ● | We are exposed to risks of operating businesses outside the United States; |
| ● | Changes in U.S. trade policy and export controls and ongoing trade disputes between the U.S. and China have adversely affected, and may continue to adversely affect, our business, results of operations, and financial conditions; |
| ● | We may be unable to obtain required export licenses for the sale of our products; |
| ● | We are exposed to various risks associated with global regulatory requirements; |
Risks Related to Our Business and Industry
| ● | Unfavorable market conditions have adversely affected, and may continue to adversely affect, our operating results; |
| ● | We face significant competition; |
| ● | We operate in industries characterized by rapid technological change; |
| ● | Certain of our sales are dependent on the demand for consumer electronic products and automobiles, which can experience significant volatility; |
| ● | We have a concentrated customer base, located primarily in a limited number of regions, which operates in highly concentrated industries; |
| ● | The cyclicality of the industries we serve directly affects our business; |
| ● | Our failure to estimate customer demand accurately could result in inventory obsolescence, liabilities to our suppliers for products no longer needed, and manufacturing interruptions or delays which could affect our ability to meet customer demand; |
| ● | We rely on a limited number of suppliers, some of whom are our sole source for particular components; |
| ● | Our failure to successfully manage our outsourcing activities or failure of our outsourcing partners to perform as anticipated could adversely affect our results of operations; |
| ● | The timing of our orders, shipments, and revenue recognition may cause our quarterly operating results to fluctuate significantly; |
| ● | Our sales cycle is long and unpredictable; |
| ● | Our backlog is subject to customer cancellation or modification which could result in decreased sales, increased inventory obsolescence, and liabilities to our suppliers for products no longer needed; |
| ● | We are exposed to risks associated with business combinations, acquisitions, strategic investments and divestitures; |
Risks Related to Intellectual Property and Cybersecurity
| ● | Disruptions in our information technology systems or data security incidents could result in significant financial, legal, regulatory, business, and reputational harm to us; |
| ● | We may be unable to effectively enforce and protect our intellectual property rights; |
| ● | We may be subject to claims of intellectual property infringement by others; |
Financial, Accounting, and Capital Markets Risks
| ● | Our operating results may be adversely affected by tightening credit markets; |
| ● | We are subject to foreign currency exchange risks; |
| ● | We may be required to take impairment charges on assets; |
| ● | Changes in accounting pronouncements or taxation rules, practices, or rates may adversely affect our financial results; |
| ● | Our current debt facilities contain certain restrictions, covenants and repurchase provisions that may limit our ability to raise the funds necessary to meet our working capital needs, which may include the cash conversion of the Notes or repurchase of the Notes for cash upon a fundamental change; |
| ● | Issuance of our common stock, if any, upon conversion of the Notes, as well as the capped call transactions and the hedging activities of the option counterparties, may impair or reduce our ability to utilize our research and development credits carryforwards in the future; |
| ● | The capped call transactions may affect the value of the 2027 Notes and our common stock; |
General Risk Factors
| ● | The price of our common shares is volatile and could decrease; |
| ● | Our inability to attract, retain, and motivate employees could have a material adverse effect on our business; |
| ● | We are subject to risks of non-compliance with environmental, health, and safety regulations; |
| ● | We are exposed to risks associated with the increased attention by our stakeholders to environmental, social and governance (“ESG”) matters; and |
| ● | We have adopted certain measures that may have anti-takeover effects, which may make an acquisition of our Company by another company more difficult. |
Consequently, such forward looking statements and estimates should be regarded solely as the current plans and beliefs of Veeco. We do not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.
